HK Web3 Feastival Roundtable: Balancing Regulation and Innovation, Building a Sustainable Asian Digital Financial Ecosystem

ChainCatcher on-site report: Global FinTech Institute Dean Li Guoquan, Hong Kong Legislative Council Member (Technology Innovation Sector) Chiu Tak-kin, Chief Public Mission Officer of Hong Kong Cyberport Management Company Limited Chen Siyuan, and Japan Virtual Currency Exchange Association (JVCEA) & Japan Crypto Asset Business Association Executive Director Ko Masashi jointly attended the HK Web3 Feastival roundtable discussion, where they discussed “Balancing Regulation and Innovation, Building a Sustainable Asian Digital Financial Ecosystem.”

Chiu Tak-kin said that the legislative process has been fully advanced. The next step is to see innovation-driven development—how to make room for new products and new business models while improving the regulatory framework. He cited the startup exemption mechanism in a U.S. bill as an example, emphasizing that the soil for innovation is equally important. He also noted that Hong Kong’s stock market currently does not allow a market-maker system, and the rules for liquidity provision in virtual asset trading will be addressed in legislative discussions within the year. As for prediction markets, he personally believes that Hong Kong does not yet meet the conditions for opening up.

Chen Siyuan introduced that last year Cyberport launched a blockchain and digital asset pilot subsidy program, with nine projects participating, more than half of which involve RWA tokenization. The goal is to help projects move from proof of concept to commercialization. He said that Cyberport has gathered more than 300 Web3 companies from 19 countries and regions, and emphasized that trusted digital identity (KYC/AML compliance) is the foundation for scaling RWA and payment projects, while secondary-market liquidity determines whether tokenized assets can become genuine market products.

Ko Masashi revealed that on April 10, Japan’s Financial Services Agency (FSA) submitted a new bill to the National Diet, proposing to move the regulation of crypto assets from the Financial Services Act to the Financial Instruments and Exchange Act. This means the government officially recognizes the investment attributes of crypto assets—a major change. He also pointed out that in the past, Japan’s strict regulation led to more than 200 companies relocating to places such as Singapore. More recently, through measures such as adjusting institutional tax regimes and discussing personal crypto tax reforms, companies are gradually moving back.

In closing, host Li Guoquan summarized that Asian jurisdictions are not competitors but parts of the same ecosystem. If compliance costs are too high, it may push high-quality institutions into the gray zone. How to lower the compliance threshold through regulatory dialogue and promote responsible innovation is a shared challenge for the Asian digital financial ecosystem.